The Solo 401K Plan, also known as the Individual 401K or Self Directed 401K Plan is an IRS approved plan that was designed specifically for the self-employed or small business owner with no employees other than the owners(s). The Solo 401K Plan can be adopted by any business with no employees, including a sole proprietorship, LLC, C Corporation, S Corporation, or partnership. The Sole 401K Plan is perfect for anyone looking to save for their retirement while at the same time gaining control over their retirement funds to make investments tax-free and without custodian consent. Why invest all your hard-earned retirement funds in the stock market when you can protect your retirement funds by diversifying your retirement portfolio by making real estate, precious metals, tax liens, and private business investments tax-free.
When it comes to deciding what type of Solo 401K plan is best for you and your business, it is important to look at all the options the plan provides to make sure it will satisfy your retirement planning, tax, and investment goals.
Most banks and financial institutions, such as Scottrade offer Solo 401K Plans. The conventional financial institution Solo 401K Plans are typically quite restrictive and only permit the plan participant to make limited investments, such as financial products, without benefiting from most of the available IRS approved options such as the tax-free loan and Roth contributions. However, if you do not want to be forced to invest all your hard earn retirement savings in the stock market, than the Scottrade Solo 401K Plan is probably not the right retirement plan for you. Furthermore, the Scottrade Solo 401K Plans will not offer a loan feature or allow you to make Roth Type contributions.
IRA Financial Group’s Solo 401K plan is unique and so popular because it is designed explicitly for small, owner only business.
In contrast to Scottrade’s Solo 401K Plan, with IRA Financial Group’s Solo 401K Plan, you can gain checkbook control over your retirement funds by serving as trustee of the plan and making traditional investments as well as non-traditional investments such as real estate tax-free and without custodian consent.
Have an investment you want to make with your retirement funds, like real estate, but Scottrade won’t let you do it even though it‘s approved by the IRS? Then IRA Financial Group’s Solo 401K Plan is your solution.
Make high Annual Tax-Free Contributions: Like the Scottrade Solo 401K Plan, with IRA Financial Group’s Solo 401K Plan you can to make tax-deductible annual contributions up to $49,000 annually with an additional $5,500 catch up contribution for those over age 50.
Tax-Free Loan: The Scottrade Solo 401K Plan offers no loan feature, while IRA Financial Group’s Solo 401K Plan allows you to borrow up to $50,000 or 50% of your account value (whichever is less) for any purpose. The loan has to be paid back over a five-year period at least quarterly at a minimum prime interest rate (you have the option of selecting a higher interest rate)
Checkbook Control: The most significant advantage of the IRA Financial Group Solo 401k Plan versus the Scottrade Solo 401K Plan is that it offers you checkbook control over your retirement funds. With the Scottrade Solo 401K Plan, the Solo 401K plan participant is relegated to making traditional investments such as stocks and or mutual funds. In addition, the Solo 401K Plan account is required to be opened at Scottrade. With IRA Financial Group’s Solo 401K Plan, the plan account can be opened at any local bank, including Chase, Wells Fargo, and even Fidelity. In addition, with IRA Financial Group’s Solo 401K Plan, the plan participant can make almost any traditional as well as non-traditional investments, such as real estate, precious metals, tax liens, third-party lending, notes, stock, private business, and much more tax-free and without custodian consent. With IRA financial Group’s Solo 401K Plan, you have the freedom to make the investments you want when you want while at the same time to open the 401K account at any local bank or credit union. With IRA Financial Group’s Solo 401K Plan, you can serve as the trustee of the plan giving you checkbook control over your retirement funds.
After-Tax Roth Contributions: Scottrade’s Solo 401K Plan does not allow for Roth (after-tax) contributions. IRA Financial Group’s Solo 401K Plan contains a built in Roth sub-account which can be contributed to without any income restrictions. In addition, Scottrade’s Solo 401K Plan does not allow for in-plan Roth conversions. Whereas, IRA Financial Group’s Solo 401K Plan allows for in-plan Roth conversions. However, the Roth Solo 401K Plan participant must pay income tax on the amount converted.
Easy Cost Effective Administration: Like Scottrade’s Solo 401K Plan, IRA Financial Group’s Solo 401K Plan is easy to operate. There is generally no annual filing requirement unless your solo 401K Plan exceeds $250,000 in assets, in which case you will need to file a short information return with the IRS (Form 5500-EZ). However, unlike Scottrade, however, the tax attorneys at the IRA Financial Group will assist you in completing this form is required.
No Tax on Real Estate Financing: Since Scottrade does not allow Solo 401K Plan participants to invest in real estate, you would not be able to take advantage of the ability to use non-recourse financing tax-free when making real estate investments with Solo 401K retirement funds. Whereas, IRA Financial Group’s Solo 401K Plan will allow one to use non-recourse leverage tax-free when making real estate investments with plan assets.
IRA Financial Group will take care of setting up your entire Solo 401k Plan. The whole process can be handled by phone, email, fax, or mail and typically takes between 2-7 days to complete, the timing largely depending on the state of formation and the custodian holding your retirement funds. Our 401k experts and tax and ERISA attorneys are on site greatly reducing the set-up time and cost. Most importantly, each client of the IRA Financial Group is assigned a tax attorney to help with the establishment of the Solo 401k Plan.